UK’s FCA Comes Down Hard On Crypto Trading Firms

The Financial Conduct Authority (FCA) of UK is investigating 18 firms involved in the sale of cryptocurrencies. The Financial Times reported on December 30 that FCA had issued alerts and warnings about firms involved in cryptocurrency investment scams.

According to UK media, the FCA has investigated nearly two-thirds of cryptocurrency related businesses since May this year. The financial regulator also said that as of Nov 12 it had initiated inquiries into 67 firms involved in businesses associated with cryptocurrencies.

On December 8, FCA proposed regulations for crypto-based retail trading in Contracts for Difference (CFDs) and other crypto related derivatives. The financial regulatory is taking strict measures on digital currency and the firms involved with it.

CryptoUK, a trade association for the UK industry said

“As an industry, we have been calling for the introduction of proportionate regulation; Over the coming months we will be working closely with policymakers, including in the FCA, to develop new regulation that strikes a balance between ending bad practice and enabling this exciting industry to flourish, as it does in other countries.”

As per the news published by Financial Times, out of the 49 inquiries on firms, ten were closed. FCA had warned the closed firms’ that they might need permission to continue their businesses.

Meanwhile, FCA has also issued consumer alerts for 39 firms, according to the details obtained by The Telegraph, which acquired through a Freedom of Information (FOI) request on December 30.

The FCA declined to name those firms (closed), because of its ongoing probes and commercial concerns for the businesses involved.

According to FCA Business Plan (2018/19) on cryptocurrencies, it notes “We will work with the Bank of England and the Treasury as part of a task force to develop thinking and publish a Discussion Paper later this year outlining our policy thinking on cryptocurrencies.”

2018 was not as significant as the previous year for cryptocurrency prices, considering that the cryptos had to pass through strict regulations by various countries across the globe. Investors from all over the world have incurred heavy losses due to descending prices of the cryptocurrencies.

Will FCA’s regulations help curb crypto scams?Share your thoughts in the comments.